NEARLY 25 million jobs and $3.4 trillion in income could be lost in the worst-case scenario due to the COVID-19 (coronavirus disease 2019) pandemic, an estimate which exceeds the job losses resulting from the 2008 subprime-mortgage crisis, the International Labor Organization (ILO) said.
According to an ILO assessment contained in its “COVID-19 and the World of Work: Impacts and Responses” report issued March 18, global job losses could be between 5.3 million under the “low” scenario and 24.7 million in the “high” scenario from a base level of 188 million in 2019.
The subprime mortgage crisis “increased global unemployment by 22 million,” ILO said in a statement Thursday.
Underemployment is also expected to increase, with the ILO identifying significant adjustments in salaries and working hours as the trigger.
For the Philippines, the ILO cited the projections of the National Economic Development Authority (NEDA) of 30,000 to 60,000 job losses due to COVID-19 related factors.
The Philippines announced a Luzon-wide enhanced community quarantine following a spike in cases of community-transmitted COVID-19 infections. Most industries have been advised to close shop for a month or adopt telecommuting, with mandatory home quarantine for most residents except for those in exempted industries delivering essential goods and services.
Lost worker income could total $860 billion on the low end of the scale and $3.4 trillion on the high end.
For workers who fall ill, the ILO said: “Labor supply is declining because of quarantine measures and a fall in economic activity. At this point, a preliminary estimate (up to 10 March) suggests that infected workers have already lost nearly 30,000 work months, with the consequent loss of income (for unprotected workers).”
ILO recommends that countries, governments, and businesses adopt strategies to ensure both the health and economic state of their workers, requiring “large-scale public support and investment.”
For the economy, the ILO added that there should be “large-scale and coordinated policy efforts” to provide needed assistance and employment especially with the virus potentially causing long-term damage.
“These measures not only cushion enterprises and workers against immediate employment and income losses, but they also help prevent a chain of supply shocks (e.g. losses in workers’ productivity capacities) and demand shocks (e.g. suppressing consumption among workers and their families) that could lead to a prolonged economic recession,” the ILO said. — Gillian M. Cortez